This paper provides an assessment of the degree to which long-term inflation expectations in the euro area are anchored to the ECB's price stability objective, with reference to the period following the announcement of the revised monetary policy strategy. This period was characterized by a marked increase in energy commodity prices. Various measures of expectations (inferred from surveys of professional forecasters, households, firms, and implied by financial asset prices) and different econometric approaches are used for this purpose.
The analysis suggests that long-term inflation expectations have returned to levels close to the ECB's inflation target after July 2021. However, in light of the persistent inflationary pressures, monitoring the risk of de-anchoring plays an essential role in assessing the appropriateness of the speed of monetary policy normalization.
